Does Obama’s Tax Plan Help Those Who Help Those in Need?

A budget plan sensitive to the needs of the poor would encourage charitable giving, right? At the very least, in an economy where more people struggle to pay for medical procedures and their kids’ education, a responsible budget shouldn’t discourage giving to hospitals or universities, right?

Obama’s plan, which the Senate Finance Committee will discuss at a hearing this Wednesday, would likely dampen charitable giving in the years ahead. The plan would not only weaken one of the incentives for those most able to donate large gifts but would further shift perceived responsibility for social welfare from individual donors to the state.

Specifically, Obama calls for raising the tax rate for families making more than $250,000 per year from 35 percent to 39.6 percent, beginning January 1, 2013. Obama also proposes reducing the rate at which these taxpayers can take itemized deductions from the current rate of 35 percent down to 28 percent, beginning January 1, 2012.

While it’s true that most donors don’t make gifts based solely on the charitable deduction, experts suggest that the deduction sometimes alters the manner and timing of giving as well as the number and size of gifts. This is especially true concerning large gifts from high-income Americans, the very taxpayers Obama’s plan targets. These high earners make up only a small percentage of total American households, but they contribute almost half of the donations claimed each year as charitable deductions.

The result of Obama’s proposals will likely be decreased revenue for hospitals, educational institutions, and nonprofits that help the poor. The Center on Philanthropy at Indiana University estimated that if Obama’s proposed changes had been in place five years ago, they would have reduced total itemized giving by wealthy households by almost $4 billion. While this is only a small percentage of total annual charitable donations, it is more than the combined annual operating budgets of the American Cancer Society, World Vision, St. Jude’s Children Research Hospital, Habitat for Humanity, and the American Heart Association.

Perhaps most importantly, Obama’s proposal sends the message that federal bureaucracy can deploy the resources of the wealthy more effectively than civil society can. Raising taxes while decreasing an incentive for charitable giving implies that the state should assume responsibility for people’s needs even at the expense of vital nonprofit organizations. Churches, ministries, and other community-based institutions, however, are often better equipped to serve people in need. And they often do so at reduced costs.

At a time when charities most need resources to care for the hurting, President Obama should seek ways to encourage voluntary giving and protect nonprofit groups. Instead, his proposed tax changes move the dial of social responsibility one more notch in the direction of the state.

Ryan Messmore is the William E. Simon fellow in Religion and a Free Society at The Heritage Foundation. Messmore examines how religious commitments are brought to bear on political life in an effort to improve public discourse and strengthen civil society.

Mr. Obama wants the freedom to contribute taken away, cause trouble for charities and keep them on edge until they are no longer able to exist. After slandering the wealthy, he doesn't want their truth known. That being, the wealthy are generous all on their own. No hand holding. No force necessary. No obama needed. If he can't show proof he was born in America, his policies are without merit.

This take-over of freedom and dignity must stop. There's no function of government necessary to increase tax and somebody better put their foot down! For those Obama steals from according to wage, how many in government with the same or higher wage are tax exempt?

Let's drop it down to 28%. We don't need to waste more tax payer money lining the pockets of millionaires. I think it should go lower than 28% – we spend way too much on tax expenditures as it is – over 1 trillion a year – we can't afford it.

Ryan, there is nothing sensible in the 'Precident's' Budget until you realize it is full of clay pigeons the Demo-crats are willing to sacrifice, payoffs to Obama's crooked friends and free money to the SOBs (the Society Of Bums). Republicans have been set up to lose the Budget fight and the Dems are perfectly willing to go over the Cliff. Chaos works in the Progressive Agenda, they want bankruptcy for the States and the Government. That way they can say "Government doesn't work and you can't fix it!" They prove that by not letting us fix it.

There is enough corruption in plain sight to Impeach Obama and his fellow conspirators. Obama is like that gunman who goes in and kills everybody he wants to. The House is waiting for him to suicide before they go in, like misguided and cowardly cops. "Hey! You guys in the House are supposed to be preventing this!" I suppose the charges in Obama's Impeachment would be 'hate speech.' So we all better just be quiet.

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